Hello Compound Community,
Backed Finance AG (backed.fi) is a Swiss company specializing in tokenizing RWAs. We propose the addition of Backed bIB01 as a collateral asset on Compound’s Ethereum market. Backed bIB01 tracks the IB01 short-term US Treasury bond ETF. Our proposal introduces a secure and compliant RWA to the Compound ecosystem, offering real-world yield, diversification, and stability.
bIB01 is popular as an underlying for DeFi protocols. It is used by Angle Protocol as collateral to mint agEUR and as lending collateral on their market ($~1m). It is used for the Ribbon Finance rEarn vault (over $3m) and the Bloom TBY product (over $2m) to provide an underlying stable yield.
For Compound, bIB01 offers exposure to a low-risk US Treasury bond ETF with stable returns. bIB01 is cross-chain and can be used as collateral on Ethereum, Polygon, Base and Arbirtrum v3 Markets. Initially, we suggest starting with just mainnet.
Most importantly, it can boost the unsubsidized yield offered by Compound today from 2.95% to ~4.5% without much effort which will increase demand and Compound’s revenues.
Backed Finance AG is a Swiss-based company that has developed a compliant solution for issuing freely transferable tokenized versions of tradable securities, such as stocks, bonds, and ETFs. Assets are issued by our subsidiary, Backed Assets GmbH. This is a dedicated special-purpose vehicle which benefits from Switzerland’s innovation-friendly regulations, such as the Digital Ledger Technology (DLT) Act, which allows the existence and transfer of digital asset securities on permissionless venues.
Key points about Backed Finance and Backed bIB01:
- Backed offers tokenized structured products under Swiss law. bTokens are tracker certificates pegged to the underlying asset’s value and fully backed by it.
- All underlying assets are custodied by regulated Swiss custodian banks.
- Backed and its products are trusted by leading industry players such as Aragon, Gnosis, Ribbon, and Angle.
- Full legal documentation on bIB01 is available here.
Backed bIB01 Token (Token contract on Ethereum)
Backed bIB01 is an ERC-20 token tracking the value of the iShares $ Treasury Bond 0-1yr UCITS ETF; this accumulating ETF consists of a portfolio of US Treasury Bonds. Each Backed bIB01 token is backed 1:1 by the underlying. bIB01 currently has a market cap of $37.7m, representing a significant share of the composable RWA market.
Key features of Backed bIB01:
- Swiss regulatory framework and an approved EU prospectus.
- Independent Proof of Reserves and Price Feeds by Chainlink.
- Stability in value and yield due to the nature of the underlying asset.
- Freely transferable ERC-20 token.
- The underlying assets are book-entry securities - separate from the custodian’s balance sheet and bankruptcy remote.
We propose the following parameters for Backed bIB01 on Compound:
- Maximum Loan-to-Value (LTV): 96%
- Liquidation Threshold: 98%
- Liquidation Penalty: 2%
Backed has access to very deep off-chain liquidity. The US-treasuries market is super-liquid, transactions of hundreds of millions of dollars can be executed without much market movement. Several of Backed clients are acting as off-chain liquidators for other protocols.
On-chain liquidity for bTokens is in development. There is some liquidity on open DEXs (e.g. balancer) that Backed does not support/maintain. Backed is developing a solution to facilitate on-chain liquidity via permissioned pools. As the underlying assets are securities, bTokens will first be wrapped in a permissioned layer to ensure they are only transferred to eligible investors that have passed KYC checks. bTokens can be wrapped and unwrapped at any time using a smart contract, only requiring the gas fee.
Listing Backed bIB01 on Compound would benefit both the Compound community and bIB01 holders. Including bIB01 as collateral would increase the Compound rates and revenues while the wider market demand for short-term US Treasury bonds surges.
We are committed to working with the Compound community to ensure the successful integration of Backed bIB01 and provide any necessary support or resources. We greatly appreciate your consideration of our proposal, and welcome any questions or suggestions as to how to make this work best for Compound users.
The Backed team
Not for the distribution to any U.S. Person or any person or address in the United States.
Backed DOES NOT sell its tokens to U.S. Persons or for the account or benefit of U.S. Persons, and tokens are not marketed, offered, or solicited in the U.S. or in any other prohibited jurisdiction.
For a full list of prohibited and restricted countries and review of legal documentation, please visit https://www.backedassets.fi/legal-documentation
The Backed Assets bIB01 (ticker symbol: bIB01) is a tracker certificate issued as an ERC-20 token, which tracks the price of the iShares $ Treasury Bond 0-1yr UCITS ETF. Backed Finance AG and its subsidiary Backed Assets GmbH are not affiliates of or licensed by BlackRock Inc, BlackRock Fund Advisors and any of its affiliates (“BlackRock”). BlackRock is not responsible in any way to bIB01 products.